BiggerPockets

I am bidding on my 3rd HUD home and this time when I was rejected they followed up not with a counter offer but with a statement of what they would take if I wanted to bid again. Is this a new development or have they been doing this all along and I never noticed?

I have not done any such HUD properties, but it sounds like just a little different wording to me.

For instance you offered 30k. They said no but we will take 80k if you want to bid again.

Sounds like a counter offer trying to get you to what they want. I would bet they dont have any other good offers and if you stay close to your guns with the next offer you make you might get somewhere.

If you want it, offer, offer, offer. The more time that goes by the more willing they will be to accept your offer.

Same as Scott.. I have never got a counter offer back from HUD.

It's a HUD property. Stay the course, as they will price reduce it. See my post at:
http://www.biggerpockets.com/forums/20/topics/33010-question-on-a-hud-offer

Eddie,

Hooks Van Holm handles my region and state too.

Face it, in the post-foreclosure properties, the listing agent wants to get as high a price as possible - to get as high a commission as possible.

At some point, the only offers that come in are all lower than the listed price, and somebody working for the seller has an awakening and makes the adjustment.

Whether HUD or REO, this is what seems to happen.

As an REO listing agent said to me the other day, even the listing agent doesn't know when that will happen - but they expect that it will at some point in most cases. And the sellers of these post-foreclosure houses are still hoping that some clueless newb will pay asking to get into a deal. As long as this also happens, expect price adjustments to be somewhat unpredictable.

But stay the course, and keep making offers that will be profitable for you.

Originally posted by Steve Babiak

Eddie,

Hooks Van Holm handles my region and state too.

Face it, in the post-foreclosure properties, the listing agent wants to get as high a price as possible - to get as high a commission as possible.

At some point, the only offers that come in are all lower than the listed price, and somebody working for the seller has an awakening and makes the adjustment.

Whether HUD or REO, this is what seems to happen.

As an REO listing agent said to me the other day, even the listing agent doesn't know when that will happen - but they expect that it will at some point in most cases. And the sellers of these post-foreclosure houses are still hoping that some clueless newb will pay asking to get into a deal. As long as this also happens, expect price adjustments to be somewhat unpredictable.

But stay the course, and keep making offers that will be profitable for you.

I will have to 100% disagree with this, as an agent on a large REO team (top 2 in the state) and knowing the biggest HUD agent in the state (over 1700 properties sold between us last year). The real name of the game is volume, if the seller reduces the price by even $10k, we really only loose $250. But if it sells fast at whatever price, it means we get another assignment or two faster. I can say, we honestly dont care about price reductions, we welcome them as it moves the property faster and we move on to the next asset. You might be talking about the 'basement' REO agent with less than 10 listings who is counting every penny. They are not the real players, they should be aggressive with their BPO prices so they can move the inventory faster.

I'm up in New England and the company that handles HUD up here is Cityside Mangement Corp. They are the ones that told us that they are sending back their bottom line on the rejections.

They also told us that about every 30 days or so they will drop the price according to the local market, basically 7-10%.

At the end of about 6 months it then gets offered to the city for $1. The city must also qualify for the property by having a use for it, or donating it to a Good Neighbor program.

If the city does not take it, it does go back on.

Priority is ALWAYS given to the owner occupied. Even if their bid is lower than an investors (to an extent).

"but these were priced much lower than usual."

Which brings up another issue--pricing disparity. I have seen comparable homes in the same area priced at $30K and $50K for homes that were virtually the same value. The $30K home sells first time offered while the $50K languishes and finally sells after a few months and a few reductions. Who is pricing them and why are they so bad at it? Or is there some hidden purpose for this disparate pricing?

This may be new to HUD but is now very common on most lender REOs. They are attempting to perform "Loss Mitigation" to maximize their dollars to reduce losses. We have made 5 offers on REOs and the ones accepted were immediately re-listed at the higher prices we had accepted with the REO sellers having the right to drop our contracts and accept any other higher or better offer up to the time of our escrow closing...so we can't count on closing our deal until it actually records. Using our offers to leverage for higher sales prices...

can someone briefly explain HUD vs REO